Chattanooga's EPB rated top utility by J.D. Power

Chattanooga's EPB rated top utility by J.D. Power

July 22nd, 2017 by Dave Flessner in Business Around the Region

A network operations technician works in EPB's state-of-the-art Distribution Center designed to compliment the citywide Smart Grid and fiber optic network.

Photo by Dan Henry /Times Free Press.

For the second consecutive year, J.D. Power consumer surveys rated Chattanooga's EPB as the best mid-sized electric utility in the South as EPB continues to build both its power and telecommunications businesses.

EPB earned the highest rankings from its customers of any mid-sized utility in the Southeast.

Georgia Power Co. ranked best among large utilities in the J.D. Power annual ranking.

Chattanooga's publicly-owned electric power provider earned highest scores for power reliability, price, billing and payment, corporate citizenship and customer service.

Fiscal 2017 results

* EPB’s electric system, which serves more than 170,000 customers, earned $7.4 million on power sales of $582.3 million

* EPB’s fiber optic system, which serves nearly 92,000 customers, earned $27.9 million on telecommunications sales of $150.1 million

Source: EPB

The top J.D. Power ranking released this week for electric utilities comes a month after Consumer Reports magazine rated EPB Fiber as the best television service provider and the fourth best internet provider among all cable companies in the country.

"This says a lot about the way our employees deal with our customers and I'm very proud of how they rise to meet our customers' expectations every day," EPB president and CEO David Wade said Friday during the utility's monthly board meeting. "J.D. Power re-affirms that our customers place a lot of value on the leading-edge technology that EPB continues to put to work for them."

EPB has benefited by its investment in its fiber optic system to bring the smart grid to its electric system and to add telecommunications services in its service territory, including the first gigabit-per-second Internet speeds to all homes and businesses of any community in North America. EPB was aided in 2010 by a $111.6 million federal stimulus grant to help pay for part of the installation of its smart grid.

EPB's telecom services of video, internet and telephone, which are made possible by its fiber optic links to all of its customers, have helped to pay for the smart grid and contributed $38 million to the electric system last year. Without that business, EPB Chairman Joe Ferguson said electric rates would be 7 percent higher in Chattanooga.

"EPB Fiber has really far exceeded our expectations and helped Chattanooga to gain global attention," Ferguson said.

In the fiscal year ended June 30, EPB said it earned $27.9 million on telecommunications sales of $150.1 million. EPB now has nearly 92,000 residential and commercial customers of EPB Fiber, or nearly three times what the utility projected it would need to break even.

EPB paid off the debt on EPB Fiber this spring — four years earlier than originally forecast — and boosted its telecom revenues by 11.3 percent in the past year. EPB Fiber earned 27.9 million in fiscal 2017, up from $23.5 million the previous year. The telecom business earned nearly four times as much as EPB's net income from electricity sales in the past year.

The fiber network allows EPB to provide more power outage information and to restore electricity service quicker, Wade said. EPB has worked to also provide more electronic bill paying options and mobile access of website data to give consumers information about how much power they are using at any one time.

Those services are increasingly desired by utility customers, J.D. Power officials said. The study found that more utility customers are getting critical information during a power outage, such as the cause of the outage, number of customers affected and estimates on when power will be restored. That helped boost overall satisfaction scores.

"The utility industry has begun to fully understand the importance of customer satisfaction over the past several years, and now many have dedicated leaders and teams focused on improving the customer experience," said John Hazen, senior director of the energy practice at J.D. Power. "A challenge we continue to see, however, is that the pace of implementing satisfaction improvements at utilities can be slower than in other industries."

Wade also praised the customer service and billing departments. EPB requires an upfront deposit from its customers to start a new electric account, or a prepay option, and works with customers when they are delinquent to figure out a repayment plan.

As a result, EPB writes off only about 0.1 percent of its revenues, or $587,600 last year. The average among all TVA distributors is nearly three times higher as a share of revenues.

"We work with people to repay their bills more than a lot of utilities and that has worked to help keep our bad debt down and our customer perception high," EPB Chief Financial Officer Greg Eaves said.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.